Mueller Industries, Inc. Reports First Quarter 2010 Results
By Mueller Industries Inc., PRNEMonday, April 19, 2010
MEMPHIS, Tennessee, April 20, 2010 - Harvey L. Karp, Chairman of Mueller Industries, Inc. (NYSE: MLI),
announced today that Mueller's net income was US$34.0 million, or 90 cents
per diluted share, for the first quarter of 2010. This compares with a net
loss of US$2.5 million, or 7 cents per diluted share, for the same period of
2009. First quarter net sales for 2010 were US$485.3 million compared with
US$326.6 million in 2009.
During the first quarter of 2010, the Company recognized a gain of
US$22.5 million (or 62 cents per diluted share after tax) on the settlement
of an insurance claim pertaining to the 2008 fire at its U.K. copper tube
operation. Further, the realization of this gain resulted in a tax benefit
primarily from the utilization of U.K. net operating losses that were
previously reserved.
Financial and Operating Highlights
Regarding the first quarter of 2010, Mr. Karp said:
- "Net sales increased to US$485.3 million primarily due to
higher selling prices that reflect increased raw material costs. The
Comex average price of copper was US$3.28 per pound in the first
quarter of 2010, which compares with US$1.57 in the first quarter of
2009. Gross profit was US$72.2 million in the first quarter which is
the best of the last six consecutive quarters.
- "Our Plumbing & Refrigeration segment posted operating earnings
of US$40.5 million that includes a US$22.5 million gain on the
settlement of an insurance claim as discussed above. Net sales for the
first quarter of 2010 were US$256.7 million. In the same period a year
ago, segment earnings were US$10.3 million on net sales of US$190.4
million. Volumes were mixed; tube volumes were lower, while fittings
volume improved slightly.
- "Our OEM segment posted operating earnings of US$16.1 million
during the first quarter of 2010 on net sales of US$232.2 million,
which compares with an operating loss of US$6.3 million on net sales of
US$138.4 million for the same period in 2009. The increase in earnings
was primarily due to higher volume and better spreads as demand
improved.
- "Stockholders' equity was US$740.8 million which equates to a
book value per share of US$19.66 of which US$10.54 per share was cash.
- "Our current ratio remained solid at 4.0 to 1. We ended the
quarter with US$397.2 million in cash and US$657.3 million in working
capital.
- "As of quarter end, our financial leverage was modest with a debt
to total capitalization ratio of 19.5 percent."
Business Outlook for 2010
Regarding the outlook for 2010, Mr. Karp said, "Business conditions have
shown signs of improvement as the economic recovery in the United States
takes hold. Although the commercial construction sector remains sluggish,
residential construction has improved somewhat from the trough. We expect
that residential construction gains will be modest for the remainder of the
year, while meaningful improvement in commercial construction is unlikely to
occur before 2011."
Mueller Industries, Inc. is a leading manufacturer of copper tube and
fittings; brass and copper alloy rod, bar and shapes; aluminum and brass
forgings; aluminum and copper impact extrusions; plastic fittings and valves;
refrigeration valves and fittings; and fabricated tubular products. Mueller's
operations are located throughout the United States and in Canada, Mexico,
Great Britain, and China. Mueller's business is importantly linked to: (1)
the construction of new homes; (2) the improvement and reconditioning of
existing homes and structures; and (3) the commercial construction market
which includes office buildings, factories, hotels, hospitals, etc.
*************
Statements in this release that are not strictly historical may be
"forward-looking" statements, which involve risks and uncertainties. These
include economic and currency conditions, continued availability of raw
materials and energy, market demand, pricing, competitive and technological
factors, and the availability of financing, among others, as set forth in the
Company's SEC filings. The words "outlook," "estimate," "project," "intend,"
"expect," "believe," "target," and similar expressions are intended to
identify forward-looking statements. The reader should not place undue
reliance on forward-looking statements, which speak only as of the date of
this report. The Company has no obligation to publicly update or revise any
forward-looking statements to reflect events after the date of this report.
(All amounts in US dollars unless otherwise specified)
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)
For the Quarter
Ended
---------------
March 27, March 28,
2010 2009
---- ----
(Unaudited)
Net sales $485,268 $326,558
Cost of goods sold 413,048 287,383
Depreciation and amortization 10,348 10,480
Selling, general, and administrative
expense 37,323 31,158
Insurance gain (22,506) -
------- ---
Operating income (loss) 47,055 (2,463)
Interest expense (2,532) (2,636)
Other income, net 140 627
--- ---
Income (loss) before income taxes 44,663 (4,472)
Income tax (expense) benefit (9,864) 1,962
------ -----
Consolidated net income (loss) 34,799 (2,510)
Less net (income) loss attributable
to noncontrolling interest (841) 18
---- ---
Net income (loss) attributable to
Mueller Industries, Inc. $33,958 $(2,492)
======= =======
Weighted average shares
for basic earnings (loss) per share 37,588 37,143
Effect of dilutive stock-based awards 94 -
--- ---
Adjusted weighted average shares
for diluted earnings (loss) per share 37,682 37,143
------ ------
Basic earnings (loss) per share $0.90 $(0.07)
===== ======
Diluted earnings (loss) per share $0.90 $(0.07)
===== ======
Dividends per share $0.10 $0.10
===== =====
Summary Segment Data:
---------------------
Net sales:
Plumbing & Refrigeration Segment $256,662 $190,393
OEM Segment 232,204 138,392
Elimination of intersegment sales (3,598) (2,227)
------ ------
Net sales $485,268 $326,558
======== ========
Operating income (loss):
Plumbing & Refrigeration Segment $40,459 $10,331
OEM Segment 16,131 (6,266)
Unallocated expenses (9,535) (6,528)
------ ------
Operating income (loss) $47,055 $(2,463)
======= =======
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(In thousands)
March 27, December 26,
2010 2009
---- ----
(Unaudited)
ASSETS
Cash and cash
equivalents $397,180 $346,001
Accounts receivable, net 256,950 228,739
Inventories 185,828 191,262
Other current assets 33,478 42,841
------ ------
Total current assets 873,436 808,843
Property, plant, and
equipment, net 242,796 250,395
Other assets 121,902 120,903
------- -------
$1,238,134 $1,180,141
========== ==========
LIABILITIES AND EQUITY
Current portion of debt $27,739 $24,325
Accounts payable 89,061 73,837
Other current
liabilities 99,306 85,208
------ ------
Total current
liabilities 216,106 183,370
Long-term debt, less
current portion 158,226 158,226
Pension and
postretirement
liabilities 42,843 44,320
Environmental reserves 23,862 23,268
Deferred income taxes 28,675 31,128
Other noncurrent
liabilities 923 887
--- ---
Total liabilities 470,635 441,199
------- -------
Total Mueller
Industries, Inc. 740,815 713,167
stockholders' equity
Noncontrolling interest 26,684 25,775
------ ------
Total equity 767,499 738,942
------- -------
$1,238,134 $1,180,141
========== ==========
MUELLER INDUSTRIES, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
For the Quarter
Ended
---------------
March 27, March 28,
2010 2009
---- ----
(Unaudited)
Operating activities:
Net income (loss) attributable to Mueller
Industries, Inc. $33,958 $(2,492)
Reconciliation of net income (loss)
attributable to Mueller Industries,
Inc. to net cash provided by operating
activities:
Depreciation and amortization 10,389 10,521
Stock-based compensation expense 704 607
Gain on disposal of properties (6) (87)
Insurance gain (22,506) -
Insurance proceeds -noncapital related 5,561 -
Deferred income taxes (3,623) (248)
Income tax benefit from exercise of stock
options (11) -
Net income (loss) attributable to
noncontrolling interest 841 (18)
Changes in assets and liabilities:
Receivables (30,689) 28,010
Inventories 3,748 38,657
Other assets 6,938 3,070
Current liabilities 30,899 (42,167)
Other liabilities 155 (620)
Other, net 280 (261)
--- ----
Net cash provided by operating activities 36,638 34,972
------ ------
Investing activities:
Capital expenditures (4,479) (4,842)
Insurance proceeds for property and
equipment 17,703 -
Proceeds from sales of properties 8 402
Net withdrawals from restricted cash
balances 2,524 5,852
----- -----
Net cash provided by investing activities 15,756 1,412
------ -----
Financing activities:
Dividends paid (3,759) (3,714)
Issuance of shares under incentive stock
option plans
from treasury 720 -
Income tax benefit from exercise of stock
options 11 -
Issuance (repayment) of debt by joint
venture, net 3,436 (10,152)
----- -------
Net cash provided by (used in) financing
activities 408 (13,866)
--- -------
Effect of exchange rate changes on cash (1,623) (1,042)
------ ------
Increase in cash and cash equivalents 51,179 21,476
Cash and cash equivalents at the beginning
of the period 346,001 278,860
------- -------
Cash and cash equivalents at the end of
the period $397,180 $300,336
======== ========
MUELLER INDUSTRIES, INC.
RECONCILIATION OF NET INCOME AS REPORTED
TO NET INCOME BEFORE INSURANCE GAIN
(In thousands, except per share data)
Earnings without insurance gain is a measurement not derived in
accordance with generally accepted accounting principles (GAAP).
Excluding the insurance gain is useful as it measures the operating
results that are the outcome of daily operating decisions made in the
normal course of business. The insurance gain resulted from final
settlement for losses claimed as a result of a fire at our U.K.
subsidiary in November 2008, the results of which are not impacted
by daily operations and are not expected to recur in future periods.
Reconciliation of earnings without insurance gain to net income as
reported is as follows:
For the Quarter Ended March 27, 2010
------------------------------------
Pro forma
Impact of Without
As Insurance Insurance
Reported Gain Gain
-------- ---- ----
(Unaudited)
Operating income $47,055 $(22,506) $24,549
Interest expense (2,532) - (2,532)
Other income, net 140 - 140
--- --- ---
Income before income
taxes 44,663 (22,506) 22,157
Income tax expense
(Note A) (9,864) (819) (10,683)
------ ---- -------
Consolidated net
income 34,799 (23,325) 11,474
Less net income
attributable to (841) - (841)
noncontrolling
interest ---- --- ----
Net income
attributable to $33,958 $(23,325) $10,633
Mueller Industries,
Inc. ======= ======== =======
Diluted earnings per
share $0.90 $(0.62) $0.28
===== ====== =====
(A) Realization of this insurance gain resulted in a tax benefit
primarily from the utilization of U.K. net operating losses
that were previously reserved.
Kent A. McKee, +1-901-753-3208
Tags: April 20, Memphis, Mueller Industries Inc., Tennessee, United Kingdom
